Strip club outfitters fighting for $300,000
AN INTERIOR decorating firm that fitted out the Chow brothers’ Auckland strip clubs is fighting back through the courts after one of the Chows’ companies went bust, owing more than $300,000.
It is the latest in a string of court battles for the controversial Wellington adult entertainment entrepreneurs John and Michael Chow as they bid to take over the Auckland sex industry.
A company, PHVS Project, was set up to refurbish their Mermaids and Penthouse bars and brothels on Auckland’s Gore St and Karangahape Rd. PHVS contracted commercial outfitter Vision Interiors to renovate the clubs but the relationship betwen the two companies deterioriated and the directors ended up in a dispute. In May 2013, PHVS refused to pay the builders’ outstanding invoices or persevere with existing contractual work, according to an Employment Relations Authority decision.
PHVS said it was unable to pay its debt to Vision and other minor creditors and put itself into voluntary liquidation, owing Vision more than $300,000. That included about $200,000 in chattels left in the clubs, such as beds, stereo equipment, mirrors and washing machines.
The loss of work from the Chows and the unpaid debt forced Vision to lay off their one employee, the decision said. As for PHVS, liquidators Gerry Rea Partners filed a final report in February, offering creditors 5.96 cents for every dollar owed. Vision would get back about $18,000, leaving the builders $282,000 out of pocket.
But the Vision directors believe there are other ways to get what they are
November 2010: As the Chows renovate the former Palace Hotel to turn it into a brothel, structural damage forces the Auckland Council to demolish the building. The brothers are ordered to contributed $250,000 to the council’s costs.
January 2014: Rival strip-club owner Jacqui Le Prou, of Calendar Girls, challenges the Chows’ liquor licence by alleging the brothers were regularly intoxicated at work and would intimidate women working at their club.
March 2014: Chows drop plans for a 15- floor super-brothel, across the road from SkyCity casino, saying they were tired of dealing with licensing challenges. owed and are not happy with the way the liquidators dealt with PHVS, so have mounted a legal challenge, applying to have the final liquidators’ report removed, and new liquidators appointed.
Vision’s lawyer Angela Hansen told the High Court the way the liquidation was concluded was ‘‘wrong, unreasonable and a breach of good faith’’. Hansen said the liquidation was rushed and did not give Vision a chance to voice its concerns about how the process was handled.
Vision’s directors Edward Fernley and Andrew More believed there were further avenues the liquidators could explore in order to get back more of their money. PHVS had previously offered Vision $170,000 to settle the debt, Hansen said, which suggested the Chows’ company had access to further funds. The liquidators from Gerry Rea Partners opposed Vision’s application, calling it an ‘‘inflammatory attack brought about by a disgruntled creditor’’, Hansen said.
Gerry Rea Partners liquidator Simon Dalton said he was offended at the suggestion he had not done his job correctly. ‘‘We believed we fulfilled our duties, simple as that.’’
Dalton said if Vision builders were successful it would set a precedent for other ‘‘disgruntled’’ creditors. The liquidators acted in the best interests of the creditors in a ‘‘straightforward’’ liquidation, Dalton said.